TITLE OF BILL: An act to amend the general municipal law, in relation
to increasing the maximum contribution under a defined contribution
plan service award
PURPOSE OR GENERAL IDEA OF BILL:
Increase the maximum contribution under a defined contribution plan
SUMMARY OF SPECIFIC PROVISIONS:.
Subdivision (b) of Section 218 of the General Municipal Law is amended
to increase the maximum contribution under a defined contribution plan
service award program from $700 per year of service to $2100 per year
Length of Service Award Programs (LOSAP) are pension- like programs
intended to help recruit and retain volunteer firefighters and
volunteer ambulance squad members. There are different types of LOSAP
programs. One is a defined contribution plan where an organization
defines a set, cash contribution it makes each year. In a defined
benefit plan, an organization defines what the cash payout to the
volunteer will be at the entitlement age. Under current law, even the
largest defined contribution programs provide a much smaller end
benefit than almost all of the existing defined benefit programs.
However a defined benefit plan has more investment return risks and
mortality risks, and is becoming less popular. Providing an
alternative the direct benefit plan in the form of a more generous
direct contribution plan with less cost volatility is necessary. The
current defined contribution has remained at $700 for a long period of
time, and thus has not been changed to reflect the need to incentivize
volunteers at organization with defined contribution plans.
PRIOR LEGISLATIVE HISTORY:
New Legislation, 2014
To be determined.
This act shall take effect immediately.
S T A T E O F N E W Y O R K
S. 7618 A. 9705
S E N A T E - A S S E M B L Y
May 16, 2014
IN SENATE -- Introduced by Sen. LAVALLE -- read twice and ordered print-
ed, and when printed to be committed to the Committee on Local Govern-
IN ASSEMBLY -- Introduced by M. of A. THIELE -- read once and referred
to the Committee on Local Governments
AN ACT to amend the general municipal law, in relation to increasing the
maximum contribution under a defined contribution plan service award
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. Subdivision (b) of section 218 of the general municipal
2 law, as amended by chapter 452 of the laws of 2004, is amended to read
3 as follows:
4 (b) The sponsor of a defined contribution plan shall contribute to the
5 plan a fixed amount of money, as determined by the sponsor, on behalf of
6 each participant who is credited with a year of service. The minimum and
7 maximum contribution requirements for a defined contribution service
8 award program shall be as follows. The minimum contribution shall be one
9 hundred twenty dollars per year of service. The maximum contribution
10 shall be [seven] TWENTY-ONE hundred dollars per year of service. The
11 maximum number of years of service for which a participant may receive a
12 contribution shall be forty years. The sponsor shall appropriate annual-
13 ly an amount sufficient to pay the contributions.
14 S 2. This act shall take effect immediately.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.